Resolution

Panasonic DSLRs (system cameras) have an excellent reputation regarding their resolution capabilities and the G1 is no exception to the rule here. The following chart compares the Panasonic DMC-G1 to the Panasonic L10, the Canon450D, the Canon 50D and the Nikon D90, based on RAW files, transformed to DNG and converted to JPG using the same Adobe Camera RAW version.

It is unfair to compare the resolution of a beginner camera with the prosumer class! No, it is not!
The maximum resolution of the G1 is comparable to the Canon EOS 50D, a 15mp DSLR! Amazing ... but ... when converting the resolution test image with the included software Silkypix, the resolution shows a different, substantially lower result which is worse than an 8mp DSLR. This is poor and a waste of the very high resolution potential of the camera.

Here're a visual illustrating the different resolution levels of Silkypix vs ACR (move move over the image):

It should be fairly simple to conclude which one belongs to which RAW converter here.

The "formal" max. resolution provided by the Imatest toolkit is in excess of 3000 LW/PH but the LW/PH value (line widths per picture height) is given relative to the vertical scale (also for the horizontal resolution). Thus a 4:3 camera has a numerical advantage over LW/PH figures for 3:2 DSLRs. The chart above shows the normalized values for the usual 3:2 format universe.
Panasonic applies automatic corrections on distortions, CAs as well as vignetting to their RAW images. While the lossless
correction of CAs can enhance the image quality, distortions- and vignetting corrections can cause a reduction of the field-of-view
and a deterioration of the border resolution due to the applied image cropping and stretching. The following image may give you an idea here (move your mouse cursor over the image again):

Dynamic Range

Comparing to other cameras in its class, the dynamimc range of the Panasonic DMC-G1 is about one f-stop smaller.
While the dynamic range of 10 f-stops is good at low ISO, it decreases clearly recognizable by 2 f-stops in mid ISO range
and drops below 6 f-stops at high ISO. The overall dynamic range of the Panasonic DMC-G1 is only about sub-average and worse compared to a conventional DSLR.

(DxO Labs)"Dynamic range or light sensitivity range of a sensor indicates the ratio of light exposure between the
highest brightness a camera can capture (saturation) and the lowest brightness it can effectively capture (typically when
noise becomes more important than signal, i.e., SNR < 0 dB). This range indicates the maximum contrast that can be effectively
captured by the sensor. The larger the dynamic range, the better, as the sensor is able to capture higher-contrast scenes.
Note that dynamic range is expressed on a logarithmic scale in EV (same as f-stop), thus an increase of 1EV corresponds to
a doubling of dynamic range." (DxO Labs)